Preemption ruling opens door to tort suits

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Washington — The U.S. Supreme Court’s recent ruling that state law drug claims are not automatically preempted by federal law is expected to generate a flood of litigation.

Because the decision takes away a common defense, a number of stayed cases can now move forward, and many cases that were thrown out based on a preemption defense could be revived.

The ruling “reaffirms that preemption is the exception and not the rule,” said Brian Wolfman, director of Public Citizen Litigation Group in Washington.

The decision has also focused attention on a pending bill that would expand tort remedies for injuries resulting from some medical devices approved by the Food and Drug Administration.

In Wyeth v. Levine, the court upheld a $6 million state court verdict for Diana Levine, a Vermont woman who lost her arm after being injected with the anti-nausea drug Phenergan.

She sued, claiming that the manufacturer, Wyeth, had failed to warn of the risks of administering the drug via the “IV-push” method.

The court rejected the manufacturer’s argument that such claims were implicitly preempted by federal law.

Justice John Paul Stevens, writing for the majority, held that Wyeth could have included stronger warnings that would have satisfied both federal and state standards.

Further, Stevens wrote, “[s]tate tort suits uncover unknown drug hazards and provide incentives for drug manufacturers to disclose safety risks promptly. They also serve a distinct compensatory function that may motivate injured persons to come forward with information.”

David C. Frederick, a partner in the Washington office of Kellogg, Huber, Hansen, Todd, Evans & Figel, argued before the court on the plaintiff’s behalf.

He predicted that the ruling will have a wide impact.

“Because there are so many instances in which federal agency action butts up [against] state law action, I think this case will end up being a landmark decision in the area of implied preemption, and will have an enormous effect [beyond] drug litigation,” Frederick told reporters after the ruling was announced. In a statement, an attorney for Wyeth called the ruling “disappointing” for the company, for patients and the general public.

“Wyeth’s labeling of Phenergan provided clear instructions and warnings about its use, including clear warnings about the very risk at issue in this case,” said Bert Rein, an attorney from Wiley Rein’s Washington office.

More Suits

The ruling is expected to spur litigation activity as more cases make it past the pleading stage because companies can no longer assert a preemption defense.

Just days after the Levine decision, the Supreme Court vacated and remanded a closely-watched 3rd Circuit decision holding that a failure-to-warn claim over the generic version of Paxil was preempted by federal law.

Conshohocken, Pa. attorney Derek T. Braslow, who represents one of the plaintiffs in Colacicco v. Apotex Inc., said that plaintiffs’ attorneys will see the effect of Levine immediately.

“We have had several cases that were stayed pending this decision,” he said. “Everyone for the most part has been holding their breath waiting for this decision to come out, and now plaintiffs’ lawyers and plaintiffs feel they can have their day in court.”

Wolfman, who represented Levine during the certiorari stage and is involved in a host of other similar matters, expects cases beyond the drug arena to be affected.

He noted that defendants have asserted similar preemption arguments in cases over mercury-laden tuna and misleading food labeling by citing to preemption language inserted into the preambles of regulations in recent years.

“Defendants won’t be able to argue that vague statements by the FDA concerning the danger of methyl mercury or the healthfulness of certain foods preempt individuals from stating a claim for damages,” Wolfman said.

Under Levine, he said, “the government must take formal steps that [impose] a regulatory command on the regulatory agency.”

Medical Device Bill According to Frederick, the Levine decision could also buoy efforts by lawmakers to pass a law overturning the court’s 2008 decision in Riegel v. Medtronic.

Riegel held that state law tort claims over FDA pre-approved medical devices are preempted by the Medical Device Amendments of 1976.

The Medical Device Safety Act of 2009, which would expressly allow state regulation of FDA-approved medical devices as well as state tort suits alleging injuries from such devices, was introduced in both houses of Congress the day after the Levine decision was handed down.

The ruling “signals that it is totally up to Congress whether or not they want to prevent state-based lawsuits,” Frederick said.

John E. Calfee, resident scholar at the American Enterprise Institute, a Washington-based public policy research group, said that the decision and the pending legislation could have enormous impact in an age where juries are increasingly hostile to drug and device manufacturers.

“If a jury thinks there should have been [a different label], they are free to decide that, no matter [what] information was available at the time and no matter if the manufacturer could have realistically put [new warnings] on the label,” said Calfee, who focuses on health care policy, the tort liability system and the Food and Drug Administration.

James R. Copland, director of the Manhattan Institute’s Center for Legal Policy in New York, expressed concerned about the breadth of the legislation.

“If it is merely overturning Riegel, which involved Class III devices … that is a much smaller subset” of devices, he said. “But if the language of the bill turns out to be much broader, it can wipe out not only Riegel, but also protections from doctrines like fraud-on-the-FDA” claims, which the Court has held are preempted. (Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341)

But Sue Steinman, director of policy at the American Association for Justice, said that the pending bill isn’t intended to usurp the FDA’s authority, but to give consumers an adequate remedy for their injuries.

“The FDA alone is not enough to protect consumers,” she said. “We do support a stronger FDA. [But] dangerous foods, drugs and devices [have] all been approved by the FDA [and] consumers injured by faulty products deserve access to justice.”

She noted that in January 2009, 1,496 cases were dismissed by federal judges citing the Riegel decision.

“These people all lost their rights, and the Medical Device Safety Act would help restore those rights,” Steinman said.